Starting a business is hard work. You have to juggle a million different tasks and hope that everything comes together to create a successful company.
But even if you’ve got the perfect product and the perfect team, there’s one more thing you need for your business to thrive: a solid foundation.
And while countless factors contribute to a strong foundation, we’ve identified seven key pillars that are essential for any thriving business. Read on.
There is no question that finance is one of the biggest challenges faced by entrepreneurs. It is often cited as the number one reason behind the failure of startups.
That’s why it’s so important to focus on financial management and other aspects of finance if you want your business to thrive.
Here are a few important aspects of finance that every entrepreneur should know about.
Being able to understand your business is a must for anyone intending to do business. Financial management is the process of managing financial resources and making decisions about how to allocate those resources.
It includes tasks such as budgeting, cash flow management, and gaining access to capital. Any business needs to have a good financial management system in place to make sound financial decisions.
Running a startup without a planned budget is as pointless as driving without a roadmap. You need to have a budget for the next two years depending on your budget for last year.
This will help you keep track of your income and expenses so far, thereby helping you make informed decisions about how to allocate your resources.
Cash flow management
Knowing how much money you have today and how much you’ll have tomorrow is essential to drive your business forward. Cash flow management includes things like accounts receivable, accounts payable, and inventory management.
Cash flow management involves forecasting your cash needs and ensuring that you have enough cash on hand to meet those needs.
Access to capital
If you want to grow your business, you need to have access to capital. This can come in the form of investors, loans, credit cards, etc.
The important thing is to make sure that you have a plan for how you’re going to use this capital and that you’re prepared to repay it.
Cost of Goods
This is the cost of the materials or services that you use to produce your product or service.
You need to make sure that your CoGs are low enough that you can make a profit while still providing a quality product or service.
Continuity income channels
If you want your business to be successful, you need to have multiple sources of income. The most common way to do this is through subscription and membership models.
This allows customers to pay for access to your products or services regularly, which provides a steadier stream of income for your business.
The best way to reduce expenses is by incorporating expense reduction strategies into your financial management plan.
There are many ways to do this, and the most effective strategies will vary from business to business.
But by reducing your expenses by even a small amount each year, you can save a lot of money in the long run.
When you’re starting a business, it’s important to have the right people in place. Your team is your foundation, and they will help you thrive (or not).
Here are a few aspects of importance as far as your team is concerned.
Hiring your team is one of the most important things you can do as an entrepreneur. However, it’s also one of the most difficult things to get right.
Many entrepreneurs make the mistake of hiring people they like, instead of hiring qualified employees.
This can be a costly mistake, and it often leads to unhappy employees and low productivity.
To hire the right employees, you need to have a system in place. The timing of hiring is important, and you should only hire when you have enough time to properly train and assess their talent.
Did you know that a team of A-players is one of the most essential ingredients of a startup? Click here to know why.
Firing or letting people go is a critical area that needs to be approached with care.
There are legal ramifications for firing, so it’s important to do your research and consult an attorney before taking any action.
When you do fire an employee, make sure you do it in a way that is respectful and fair without getting too many emotions involved.
Empowering your employees is another important pillar of success. As entrepreneurs, it is our responsibility to empower people and give them the freedom to make decisions.
This can be difficult for some entrepreneurs, but it’s essential if you want your business to succeed. When employees are empowered, they feel like they’re a part of something larger than themselves.
This often leads to higher job satisfaction and increased productivity.
Timing of hiring
It’s important to be strategic when hiring employees. You need to have enough time to properly assess their talent and train them for the role they will be playing in your business.
The timing of hiring is especially important when you’re starting a business. You don’t want to hire too many people at once, or you might not have the time or resources to properly train them.
Hiring at the wrong time can also lead to low productivity and unhappy employees. If you’re not sure when to hire, consult an attorney or other business professionals for advice.
You also need to consider the compensation you offer your employees. This is especially important when your startup is just at its beginning phase and you might not have the money to pay your employees what they’re worth.
However, it’s important to remember that you get what you pay for. If you can’t afford to pay your employees a competitive salary, you may want to consider hiring contractors instead of full-time employees.
Training your employees is essential to the success of your business. You need to make sure they are properly trained for their role and that they understand your company’s culture. Training can be costly, but it’s an investment that will pay off in the long run.
The issue with having a business of your own is that you become the default go-to person for any friend or family member who needs a job.
Make sure you don’t fall into the trap. Only hire people who have the right skills and qualifications for the vacancy you have.
Personality profiles are one means of talent assessment that can help you make hiring decisions. By using personality profiles, you can get an idea of how well someone will fit into your company.
Your Products and Services
When you’re starting a business, it’s important to have a clear vision of what you’re selling and how you’re going to make money from it.
Many entrepreneurs make the mistake of focusing on the wrong things, or not having a solid plan for their products/services. Here are a few things you need to look into.
Ask yourself, does your business have the potential to make money?
Being viable doesn’t mean that you have to be profitable from day one, but you should have a plan for how you’re going to turn a profit in the long run.
Your value proposition is what makes you different from your competitors and more appealing to your target audience.
It’s important to have a clear understanding of what this element is before you start marketing your business.
Quality control is another essential aspect of any business, especially when you’re selling physical products. You need to make sure that your products are up to par and that you’re not selling anything that could damage your reputation.
Remember that selling low-quality products can do more harm than not selling anything.
You need to make sure that your business is sustainable and that you’re not selling products or services at a loss. Your margin is the gap between your expenses and your prices. One way to improve your margin is to drive your costs down.
You can do this by finding cheaper suppliers or becoming more efficient in your production process.
Another way to increase your profits is to raise your prices. However, you need to make sure that you don’t price yourself out of the market.
Another important consideration for any business is to make sure that you’re not too reliant on a single market.
If that market dries up, you’ll be in trouble. Instead, try to offer a variety of products and services that appeal to different audiences.
This will help ensure that you have a backup plan if one of your products or services fails.
One of the easiest ways to increase revenue is to raise your prices. However, you need to make sure that you don’t price yourself out of the market.
You should also periodically check to see if your competitors have raised their prices so that you’re not undercutting yourself.
To learn more about the tactics of pricing a startup product, click here.
You don’t want your customers to buy from you just once, you want them to be loyal customers who keep coming back.
Lifetime value is the total amount of money that a customer spends with you throughout their relationship with your business.
There are a number of ways to increase the lifetime value of a customer such as upselling and cross-selling.
The only way to retain customers is by providing excellent customer service. People have to like working with you if they’re going to keep buying from you.
If they don’t, it doesn’t matter how good your product is.
It’s also important to have a good sales strategy in place so that you can reach more customers. You may also want to consider targeting a different market segment or expanding into new territories.
Expand your reach by reaching out to new customers and tapping into new markets. You can also improve your sales strategy by using more effective marketing techniques.
The final thing you need to consider is your competition. You need to understand your competition and understand where you stand against them.
This will help you make strategic decisions about your business.
Market research, customer surveys, and competitor analysis can help achieve this.
There’s no question that marketing is essential for any business – big or small, new or well-established.
You are not going to get very far if you don’t put in the effort to market your product or service.
Marketing helps you identify your target audience, understand their needs and desires, and create a message that resonates with them.
Stay in your lane
If you are not good at marketing, get someone to do it for you. Hire experts or outsource it.
Marketing is a complex field and there are many different aspects to it – from identifying your target audience to creating effective ads.
You must focus on what you’re good at and leave the marketing to the experts.
Before you start marketing your product or service, you need to have a good understanding of your target market.
Who is interested in your product?
What is their age demographic?
What are their needs and desires?
These are the questions you need answers to so that you can market to the right people.
You can conduct market research, surveys, and interviews to get to know your audience better. The more insight you have into their needs and desires, the better able you will be to create marketing that resonates with them.
Don’t fall into the trap of thinking that the latest marketing trend is always the best. Just because something is new doesn’t mean it’s going to work for your business. Trying to follow every new trend without having the necessary resources is a recipe for disaster.
Stick with what works for you and your business and don’t be afraid to experiment with new ideas.
Unique Selling Points (USPs)
What makes your product or service different from the competition?
What are your unique selling points?
These are the things you need to focus on when creating your marketing messages.
Marketing is all about differentiation – making your product or service stand out from the rest.
Your marketing messages should always be focused on the customer and how your product or service can help them.
Don’t make the mistake of talking about yourself – instead, use customer-centric language that emphasizes the benefits they will receive.
Intimacy with customers
Marketing is not a one-way street. It’s important that you listen to your customers and take their feedback into account.
Develop a personal connection with your customers and build trust. It’s important to connect with them on a human level and understand their needs and desires.
The more intimate you are with your customers, the more likely they are to buy from you. An ideal customer profile can help you better understand your customers and their needs. Here’s how to define yours.
In today’s data-driven world, it’s important that you use data to inform your marketing decisions.
Collect data on your target audience and use it to create more effective marketing messages. Data will help you understand your customers better and enable you to target them more effectively.
Consistency is key when it comes to marketing. If you want your marketing messages to be effective, you need to be consistent with them.
You can’t bombard your customers with a new message every day – they will quickly get tired of it and tune you out. Instead, stick to a consistent message that you can deliver consistently.
Be consistent with your branding and overall strategy too.
One of the best ways to ensure consistency in your marketing is to have campaigns that run automatically all the time.
There are many tools available that can help you create funnels and campaigns, connect with your audience, and email prospects. Automating your marketing will help you stay on track and keep your messages consistent.
To succeed in marketing, you need to have the necessary resources. This includes financial resources, time resources, and talent resources. Make sure you have enough of each so that you can execute your marketing plan effectively.
Sales are the lifeblood of every business. Without sales, your company will eventually die. That’s why it’s so important to have a solid sales strategy in place. Here are a few things you could do to see your sales rocket.
You need to be fully committed to your sales efforts if you want them to be successful. This means dedicating the necessary time and resources to making your sales process work.
It also means being willing to let other people sell your product for you so that you can focus on the bigger picture.
Create a sales process
A sales process is a step-by-step system that takes your customers from awareness to purchase.
It should have a beginning, middle, and end so that you can track your progress and ensure that each customer is getting the best possible experience.
Click here to learn why it’s important to sell before you build.
Your commission plan should be designed to incentivize your sales team to sell your product. It should be competitive and advantageous so that your team is constantly striving to hit their sales targets.
Hire hungry people
When you’re looking for new salespeople, you want to find individuals who are hungry for success.
These are the people who will work hard to achieve their goals and help your business reach its full potential.
Invest in resources
Sales is one of the most resource-intensive units of your business. Therefore, you must be willing to invest in the necessary tools and services.
This includes things like sales training, CRM software, and lead generation services. By providing your team with these tools, you will help them work more efficiently and achieve better results.
It’s important to set clear goals for your sales team and track their progress over time. This will help you determine whether or not they are meeting your expectations and identify areas where they need improvement.
Inspect what you expect
Regularly inspecting your sales process, results, and the team is essential for ensuring that everything is running smoothly. This will allow you to make changes as needed and ensure that your business is on track for success.
Create a positive culture
Ever heard that a rising tide lifts all ships?
A positive culture within your sales team is essential for driving results. When your team is motivated and excited about their work, they will be more likely to sell more products and achieve their goals.
Make it fun
Tension and stress can be major roadblocks to success. That’s why it’s important to make sure your sales team is having fun.
This will help them stay motivated and productive throughout the sales process.
Your Business Operating Systems
Businesses that thrive have well-defined business operating systems in place.
These systems allow the business to become sustainable and scalable, freeing the owners to do what they want to do.
Here are a few important ones.
Customer relationship management allows you to keep track of your customers, their contact information, what they’ve bought from you, and more.
It also allows you to keep track of your leads, so you can follow up with them at the right time.
Having a good CRM system in place is essential for any business that wants to scale.
All of your processes, from how you take orders to how you ship products, should be documented and accessible to all employees.
This makes it easy for new employees to catch on quickly and helps ensure that everyone is following the same procedures.
Your business policies should cover everything from your return policy to your hiring practices.
Having clear policies in place makes it easier for your employees to make decisions and helps keep your business running smoothly.
Your business procedures should detail how each process is done, from start to finish.
This will help ensure that every employee is doing things the same way and that no steps are missed.
Having a system in place to record the working methods of your employees is essential for any business that wants to scale.
New employees should be able to easily catch up by watching recorded training videos or reading detailed process documentation.
Checks and balances
Putting checks and balances in place will help ensure that no one person has too much power and that all decisions are made with the best interests of the business in mind.
This is essential for any business that wants to thrive over the long haul.
You are the biggest factor in the success or failure of your business. Everything starts and ends with you.
Many entrepreneurs try to blame others when things go wrong, but the truth is that you are in control of your destiny.
Here are a few factors that impact your business that you have ultimate control over.
The entrepreneur is the one who is responsible for setting a vision for a business.
Ask yourself, what do you want to achieve with your business?
What are your long-term goals?
If you can’t answer these questions, it’s time to sit down and think about what you want out of your business. Once you have a clear vision, you can start working towards making it a reality.
Your life balance
A lot of times, entrepreneurs are so focused on their business that they don’t take the time to balance life and work. This can lead to a lot of stress and unhappiness.
Are you able to find happiness in between work and life?
Or are you always stressed out?
It’s important to find a balance that works best for you. The stress that arises from a lack of work-life balance would harm your business.
Here are a few tips on how to find time for personal and professional development as an entrepreneur.
The ability to focus is another key factor for entrepreneurs. Many things can distract us from our work, but if you’re able to stay focused, you’ll be successful.
Are there any distractions that are pulling you away from your business? If so, it’s time to get rid of them.
Your abilities and your weaknesses
Another important thing to consider is your strengths and weaknesses.
What are you good at?
What are you not good at?
It’s important to play to your strengths and delegate the tasks that you’re not good at. There’s no shame in admitting that you’re not good at something – we all have our areas of expertise.
One of the biggest enemies of any business is self-doubt. Many entrepreneurs give up before they even start because they’re afraid of failure.
If you don’t believe in yourself, no one else will.
So, how do you overcome self-doubt?
Time management is another commodity that’s hard to come by these days.
We all have the same 24 hours in a day, but it’s how we use those hours that counts.
If you can manage your time wisely, everything else will fall into place.
Change is inevitable, and businesses have to adapt to survive.
Are you able to manage change within your business?
If not, it could be the downfall of your company.
Be welcoming of change and embrace it.
So there you have it, the seven pillars that will help your business thrive.
It’s not an exhaustive list, but it should give you a good starting point.
As with anything in life, nothing is guaranteed, but if you focus on these areas you’re likely to see positive results.
You can’t just focus on one or two and expect everything to work out.
That may be difficult and require some hard work, but it’s worth it in the end.
Are you looking to take your business to the next level? If so, you must take a critical look at your business health. Don’t wait any longer – Take a free business health checkup now and start taking the necessary steps to improve your success.